Video: Which form do I use? (estimates, invoices, and sales receipts)

Ever wonder what the difference is between estimates and invoices? And when do you give a customer a sales receipt? Follow Charlie the Web Designer as he uses all three forms.

Video script:

The QuickBooks for Mac team presents…”Forms, forms everywhere. Which ones do I use when?”

Sales forms…what are they? In a nutshell, sales forms are what you use with customers to bring in money for your business. The three sales forms we’re going to talk about in this video are estimates, invoices, and sales receipts. Now we’re going to look at how one small business owner uses all three of these forms in doing business with a single client.

Meet Charlie the Web Designer. Charlie gets a call from a potential customer. Kristy Abercrombie needs a new website.
After listening to what Kristy wants for her site, Charlie creates an estimate. An estimate is lists out the work Charlie plans to do for Kristy and what he’s going to charge. One important thing to know about estimates…if you don’t see Create Estimates on the Customers menu, go to your Preferences and choose Sales and Invoicing and turn on estimates there.

So here’s Charlie’s estimate. You can see that he’s listed the work he plans to do. Because Charlie is a service provider, he charges by the hour. For each part of the project, Charlie lists the number of hours he estimates in the Quantity column and the rate per hour in the Cost column. QuickBooks calculates the totals for him on the estimate.

Then Charlie gets good news. Kristy has accepted Charlie estimate. Charlie builds the Website of Awesomeness for Kristy.

Now that the website is done, Charlie creates an invoice. An invoice is a sales form that requests payment for the work Charlie did.

Because Charlie created an estimate, he can reopen that estimate to create the invoice so he doesn’t have to create it from scratch. QuickBooks transfers all the information from the estimate to the invoice. Charlie can then change any of this information if he needs to.

When Kristy receives Charlie’s invoice, she sends him a check.

The next month, Charlie goes to Kristy’s office and spends a couple of hours with her showing her how to create videos for her website. He spends two hours with her, and Kristy writes him a check on the spot.

Charlie whips out his laptop and enters a sales receipt. A sales receipt is a sales form that is a record that your customer has paid you at the time of service.

Here’s what Charlie’s sales receipt looks like. Like estimates and invoice, he lists the work he did and then enters the number of hours and his hourly rate.

So let’s review what we’ve gone over.

An estimate is what you think the job will cost.

You send an invoice when the job is done and the customer needs to pay you.

And you use a sales receipt when a customer pays you on the spot and needs a record of the payment.

So that’s how you use estimates, invoices, and sales receipts in QuickBooks.

Shelly King works for Intuit as a member of the QuickBooks for Mac team. She’s the Managing Editor for Little Square and its main contributor. Shelly grew up in the South until 1994 when the Internet called her to Silicon Valley. She’s done a lot on the web ever since. Little Square was her idea. Yep, it’s all her fault. See all of Shelly’s articles